SPEL Semiconductor Limited, India’s first & only semiconductor IC Assembly & Test Company, has exceeded expectations considering the turbulent economic scenario. Announcing its audited results for FY 2008-09, SPEL reported sales of Rs.81 Crores (11.17% growth in rupee terms compared to last FY) with a PAT of Rs.6.23 Crores (17.25% lower compared to last FY). The chip market held up relatively well during the 1st half of the FY and the recession had a negative impact during the 2nd half.

The performance during 2008-09 was largely affected by lower sales during the 2nd half of the FY due to the global recession, reduced average selling prices thereby bringing down contribution and foreign exchange fluctuation losses. To combat this the Management introduced various cost saving measures including lean manufacturing techniques, working with vendors to reduce raw material prices, investment in energy saving equipment and stopping expendable expenses. Employees also well contributed through a 10% cut in their salary. By these measures SPEL stood up to the testing times and posted a positive PAT in spite of all the recessionary pressures.

The global slowdown caused by macroeconomic issues impacted consumer spending on all electronic devices, of which ICs play an integral role. However, this is certain to gradually recuperate in the coming quarters. It is estimated that after a 17% industry decline in 2009, a “boomerang” recovery will come about in 2010 with a total y-o-y increase of 17% expected the next year. To fully utilize this growth pattern, SPEL plans for capacity addition during this FY that will reap the benefits during the next FY. The Management is also exploring the European & APAC markets to further enhance the Customer base. The outlook is better than Gartner’s Q1 projections, when it forecast semiconductor revenue to decline by 24.1% in 2009. PC shipments came in better than expected, which led to an improved outlook.

Being committed to sustained long term growth, SPEL has been working on various long term measures such as building its cash reserves, identifying & training future leaders and market intelligence to derisk its market & application base. SPEL is committed to firmly establishing itself as the Natural Destination for global Customers seeking cost effective Assembly & Test services. SPEL’s ICs are used globally in applications spanning Consumer Electronics (Cell Phones, PDAs, Digital Cameras), Computing (Desktop & Notebook Computers), Communications (routers, switches & hubs) and Automobiles.